Nationwide, one-third of homeowners who lost
insurance have moved or plan to move, but nearly the same share are
staying in their home with little or no coverage
(NASDAQ: RDFN) —Nearly three-quarters (70.3%) of Florida
homeowners and over half (51%) of California homeowners say they or
the area they live in has been affected by rising home insurance
costs or changes in coverage (e.g., their insurer dropped them) in
the past year. That compares with less than half (44.6%) of
homeowners nationwide, according to a new report from Redfin
(redfin.com), the technology-powered real estate brokerage.
This report is based on a Redfin-commissioned survey by
Qualtrics in February 2024. The nationally representative survey
was fielded to 2,995 U.S. homeowners and renters.
Insurance is top of mind for homeowners in Florida and
California because those states are the epicenters of the insurance
housing crisis. Many homeowners have seen their premiums skyrocket,
and some have lost coverage altogether because intensifying natural
disaster risk has prompted many insurers to stop doing business in
Florida and California. Seven of California’s biggest property
insurers have recently opted to limit new policies in the Golden
State amid increasing wildfire risk. And in the Sunshine State, 11
insurers have liquidated amid growing flood and storm risk.
Mounting insurance costs and natural disasters are prompting
some people to relocate. In Florida, 11.9% of survey respondents
who plan to move in the next year cited rising insurance costs as a
reason—roughly twice the national share of 6.2%. And in California,
13.1% of people who intend to relocate in the coming year cited
concern for natural disasters or climate risks as a reason,
compared with 8.8% of respondents nationwide. But while some people
are leaving disaster-prone areas, there are still more people
moving in than out, a separate Redfin analysis found.
“Homeowners living in areas where insurance premiums are surging
are at risk of seeing their properties gain less value than
homeowners in areas with stable premiums—and in some cases, they
may even lose money,” said Redfin Chief Economist Daryl
Fairweather. “Homes with low disaster risk and low insurance costs
will likely become increasingly popular, and thus more valuable, as
the dangers of climate change intensify.”
Condo prices in some parts of Florida have already started to
fall amid an increase in insurance costs and HOA fees.
12% of Florida Homeowners Who Have Faced Insurance Changes
Were Dropped By Their Insurer
This section focuses on the 1,198 U.S. homeowner respondents who
said they or their area has or may have been impacted by rising
home insurance costs or changes in coverage in the past year.
Redfin asked these homeowners specifically which insurance
insurance-related changes they’ve seen and are concerned about.
Roughly one in eight Florida respondents (12%) and one in nine
California respondents (10.7%) said their insurance company stopped
offering coverage for their home, compared with 8.3% of respondents
overall.
Other homeowners are worried they will be dropped by their
insurer in the future: Over one-quarter (27.7%) of respondents in
Florida said they are or have been concerned their insurer may stop
offering coverage for their home, compared with 13.5% of
respondents in California and 8.9% of respondents as a whole.
Most respondents have seen a rise in insurance costs: Overall,
nearly three-quarters (71.7%) said their policy premium increased,
with a slightly higher share in Florida (76%) and a slightly lower
share in California (62.9%).
The average annual U.S. home insurance rate is expected to rise
6% this year to $2,522 after surging 19.8% between 2021 and 2023,
according to Insurify. In Florida, the average annual rate is
$10,996—higher than any other state.
1 in 3 Homeowners Who Lost Insurance Coverage Has Moved or
Plans To Move
Roughly 100 homeowners who participated in the survey indicated
that their insurance company stopped offering coverage for their
home. One-third (33.2%) of those respondents moved or plans to move
to a new area where coverage is available. But nearly the same
share (30%) are staying in their home with little or no
coverage.
Almost half (46%) of respondents who lost insurance coverage
said they’ve found a new insurer to cover their home. A similar
share (44.5%) said they pay a significantly higher premium for
coverage than before.
Oftentimes when homeowners lose insurance coverage through a
private insurer, they’re forced to buy into a more expensive
state-created plan—such as California’s FAIR Plan or Florida’s
Citizens Property Insurance Corp. But in many cases, it’s unclear
whether those programs have enough money to cover losses; a
Bloomberg analysis found that 36 states have residual insurance
plans, but 21 of those don’t explicitly spell out how they’d pay
deficits that exceed their assets.
Only One-Third of Homeowners Know Which Natural Disasters
Their Insurance Covers
Roughly one-third of U.S. homeowners (34%) know which natural
disasters their insurance for their home covers. An even smaller
share—27.2%—know which natural disasters their insurance covers and
how much damage is covered under their policy.
With climate disasters on the rise, homeowners should revisit
their existing insurance policies so they know exactly what and how
much is covered, Fairweather said. In some cases, they may want to
purchase an additional policy covering a specific disaster, like
fire or flood.
Over One-Third of Real Estate Agents Have Seen an Increase in
Insurance-Related Issues
More than one-third of real estate agents (34.4%) have
experienced an increase in issues related to home insurance during
transactions over the past year.
This is according to a separate Redfin-commissioned survey of
500 real estate agents from a wide spectrum of U.S. brokerages,
conducted by Qualtrics in December 2023.
The share was significantly higher in Florida and California. In
Florida, nearly three-quarters (73%) of agents have seen an uptick
in insurance issues in the last year, and in California, the share
was 64%.
To view the full report, including charts, please visit:
https://www.redfin.com/news/home-insurance-survey-report-2024
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We run
the country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. Our home-buying
customers see homes first with on-demand tours, and our lending and
title services help them close quickly. Customers selling a home
can have our renovations crew fix it up to sell for top dollar. Our
rentals business empowers millions nationwide to find apartments
and houses for rent. Since launching in 2006, we've saved customers
more than $1.6 billion in commissions. We serve more than 100
markets across the U.S. and Canada and employ over 4,000
people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20240417410953/en/
Redfin Journalist Services: Kenneth Applewhaite, 206-414-8880
press@redfin.com
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